Compiled from wire services Jupiter Telecommunications Co., Japan’s largest cable television operator, and its rival, Titus Communications Corp., the second-largest, announced Tuesday that they have agreed to effectively merge on Sept. 1 through a stock swap scheme.
The merged company would have 660,000 subscribers and, with 28 cable TV systems nationwide, would save on the cost of upgrading network systems, giving it a technological advantage in providing rapid access to a wide range of broadcast and Web services.
Jupiter is 60 percent owned by Sumitomo Corp. and 40 percent owned by Liberty Japan Inc., a unit of AT&T Corp. of the United States. It operates about 20 cable TV stations in and around Tokyo, Osaka, Fukuoka and their neighboring areas.
Titus is controlled by U.S. computer software giant Microsoft Corp., electronics machinery maker Toshiba Corp. and trading house Itochu Corp. Its cable network covers Tokyo and its neighboring prefectures.
Jupiter and Titus plan to connect their cable TV stations across the country with high-speed, large-capacity fiber-optic networks.
Cable TV is considered to be a promising next-generation means of telecommunications that will be able to offer Internet access, telephone and broadcasting services together.
The merger is likely to create a potential threat to dominant telecommunications carrier Nippon Telegraph and Telephone Corp., whose high fees have been widely blamed for stifling the number of Internet users in Japan.
The planned deal calls for Jupiter to exchange 0.32 new share for each Titus share.
As a result, major trading firm Sumitomo and Liberty Media are expected to hold the largest stakes in the merged company.
Microsoft will have the third-largest stake, followed by trading house Itochu Corp, and electronics maker Toshiba Corp., each of which hold a 20 percent stake in Titus.
Because there are so many small cable TV operators in Japan, many industry analysts expect the Jupiter and Titus merger to spark further integration of these operators in the next few years and intensify competition with NTT.